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Paul Fisher, Director, Boyce Chartered Accountants in Moree, NSW examines the social, environmental and financial impacts of the drought

As a regionally based accounting firm we are seeing first hand the emotional, environmental and financial effects of this drought.

The directors of Boyce Chartered Accountants and our team live in the communities in which we operate and a large proportion of our clients are either primary producers or directly dependant on them.

As a result we have a unique perspective into the effect of this drought as it continues its grip. Regional communities are facing an exodus of people – farms that used to support three or four families and generations now support just one.

The success of the mining sector, the boom and bust nature of agriculture and community expectations are just three of many reasons. The ripple effect of this exodus can be felt by school closures and the loss of businesses and other services as populations decline and regional tourism wanes.

People who stay struggle for employment as the opportunities for farm and other work are limited. The fact that my home town of Moree now has two practising psychologists gives one an idea of the seriousness of the impact.

Aside from the human effect of the drought, we need to consider the environmental issues of such a prolonged dry period. River systems are struggling to cope – people are questioning how much water can sustainably be used by agricultural systems that were established during the unusually wet seasons of the second half of last century.

Add to this the politics where land and water have become assets of the state but rural communities and the farmers, especially, are held responsible for managing these resources. Many rural businesses are currently experiencing negative returns – a situation most can ill-afford because historically cashflow in agricultural enterprises is erratic.

Fortunately, the impact of the drought has been cushioned by rising land values that have, to date, remained strong. This could all spell the end for many rural communities were it not for the indomitable spirit of those who live out here.

Agriculture is renowned for its efficiency gains, and this continues – drip, tape and travelling irrigation systems, crop and livestock rotation systems and soil mapping technology are great examples. The world prices for soft commodities are at an all time high.

The Aboriginal Employment Strategy, developed to find meaningful, long-term employment for our Indigenous community members, has spread as the Music Festival at Mungindi (pop 660) have grown and become a focus for their communities.

Agriculture has always been an emotional, capital intensive, hands-on business with huge variances in cashflows. If you redefine profitability as the long term average yearly cash available for further investment or debt repayment, many farmers have always struggled. As heartbreaking as this current drought is, it will abate and our farmers will begin preparation for the next dry period.

As the uncertainty of climate grows, accounting firms such as Boyce Chartered Accountants, banks and those that shape government policy have a critical role to play in helping to maintain the fabric of our regional communities.

Paul Fisher is a Chartered Accountant and Director of Boyce Chartered Accountants – a Westpac business customer based in regional Australia

*this Talkback is reproduced from Westpac's 2007 Stakeholder Impact Report